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18 Sep 2015
FOMC aftermath leavs markets mixed - Rabobak
FXStreet (Guatemala) - Analysts at Rabobank noted that in FX, wobbly EM may breathe a sigh of relief as USD sagged on the day, but those struggling to export their way out of growing domestic weakness will soon be cursing that gain.
Key Quotes:
"In major crosses EUR was at 1.1420 post-Fed, putting more heat on Mr. Draghi, while JPY was under 120 again, also putting heat on the BOJ (who moved to La-La Land some time ago).
Arguably China (who Yellen named directly as a Fed focus) may benefit from a temporary reduction in the rush towards USD; however, capital outflows appear to still be a real problem that is not easing yet. On that note, the central government has just released a policy statement discussing how it will open up the economy ahead.
Apparently, this will include speeding up capital-account convertibility (just as they are cracking down on all capital outflows?); widening the futures market (which has just had regulatory shackles put on it); and widening the CNY’s floating band (which right now is more of a tourniquet than a band, just as it was before the shock August devaluation) Let’s hope the gap between word and deed in China is narrower than it’s proving for the Fed."
Key Quotes:
"In major crosses EUR was at 1.1420 post-Fed, putting more heat on Mr. Draghi, while JPY was under 120 again, also putting heat on the BOJ (who moved to La-La Land some time ago).
Arguably China (who Yellen named directly as a Fed focus) may benefit from a temporary reduction in the rush towards USD; however, capital outflows appear to still be a real problem that is not easing yet. On that note, the central government has just released a policy statement discussing how it will open up the economy ahead.
Apparently, this will include speeding up capital-account convertibility (just as they are cracking down on all capital outflows?); widening the futures market (which has just had regulatory shackles put on it); and widening the CNY’s floating band (which right now is more of a tourniquet than a band, just as it was before the shock August devaluation) Let’s hope the gap between word and deed in China is narrower than it’s proving for the Fed."